Essar flagship fuel station in Chennai

Essar Oil Ltd is set to inaugurate its flagship petrol station, its first in Chennai.

According to company spokespersons, construction work on the retail outlet for automobile fuel is at an advanced stage and likely to be completed in less than two months.

The outlet coming up at Anna Nagar is promoted as a point for multiple activities other than petrol and diesel sales, including an ATM, an eating joint, etc.

All Essar Oil’s petrol stations are franchisee-operated and the company has three models. Land costs apart, franchisees have the option to set up a mini outlet with an investment of about Rs 12-13 lakh; a regular outlet at about Rs 20-22 lakh; or a premium outlet costing more than Rs 30 lakh.

Essar’s business model for such retail outlets emphasises a fast return on investment, with a payback period of less than four years. A flagship outlet can cost more than Rs 60 lakh, and Essar has very few of them. In Tamil Nadu, there is one in Chennai and another in Tirupur.

Essar has been steadily ramping up its presence in petrol stations in Tamil Nadu, but so far focused mostly on small towns and cities; and in Chennai it has till now stuck to the suburbs, where it has five outlets. It has over 55-60 outlets in the state and another 25 are in various stages of construction.